The Cash & Culture Paradox

“You get what you pay for”, or so the saying goes.  But does more always mean better?  As in paying more means a better product, better service, better overall experience?

I’ve been seeing an awful lot lately in tweets, blogs, infographics and even survey research that suggest consumers are willing to pay more for better service or a better overall experience.  Well, here’s my opinion on that.  Every company that has crappy customer satisfaction, NPS or other experience-type metrics just got a free pass to raise prices in the name of superior customer experience.  “Yes, we stink.  But if you pay more, we’ll blow your socks off.”  Hogwash. 

How then do you explain the customer experience and trust ratings of companies like Costco and Southwest Airlines?

What I think is that customers are so far down at the end of their rope, that their acquiescence to such a trade off is a desperate cry of those that have simply been worn out.  Companies like Costco and Southwest consistently demonstrate that you don’t have to pay more to get more.

The same applies internally when looking at employees that are responsible for execution of the customer experience – especially those on the front line in day to day customer facing roles.

I was at an Argyle conference on customer experience a couple of weeks ago in Chicago where this topic generating a lot of dialog.

The notion of the “super agent” was batted about for quite a while.  As the execution of the customer experience at the front lines becomes more complex, spanning an ever-growing range of channels, the need to raise the skill level of those delivering the service is real.  Now, as someone who runs a customer experience BPO, I was actually happy to hear general agreement that up-skilling customer service agents would require shifting from continuous cost cutting to making real investments in human capital and other components of the service deliver model.  “How can you expect someone making ten bucks an hour to deliver superior service?”  Admirable.  But, after thinking about it now for a couple of weeks, I came to settle on the same word.  Hogwash. 

So, I did some poking around to see if I could get a sense of what the going rate is for customer service representatives that deliver exceptional service and customer experience.

At Zappos, the average customer service agent pay is $23,000 per year according to this presentation.  And, other data confirms that Zappos pays its reps about 3% below industry averages.  We’re all acutely aware of Zappo’s commitment to and reputation for customer service.

Chik-fil-A is turning the fast food industry on its head.  Not with superior cuisine, but by creating an in-store experience rivaled by none.  So, what can you expect to rake in as an associate manager in a store?  $27,500 a year according this PayScale.com survey updated just last week.

Are there examples to counter my argument?  Of course.  Ritz Carlton pays a heck of a lot more than Motel 6.  But the point is, that the cause and effect between compensation and service delivery does not hold water.

What does matter?  Culture.  Finding, hiring, training and caring about employees that care about delivering a superior experience.  This is the obvious common denominator that runs through all customer-centric companies.  They put employees first.  They are passionate about a service culture.  And, that translates to the experience customers receive.

Money can’t buy you love.  It can’t buy you happiness.  And, it most certainly does not insure happy customers. 

Comments

  1. I agree with you 100%, Barry. In my mind, companies that pay less but foster positivity, creativity, respect, and genuine care for their employees and their customers, will receive a far greater return than companies that pay their employees more but are lacking when it comes to those other qualities. Money alone isn't a guaranteed motivator. Thanks for the great post!

    Cheers,
    Zoe Geddes-Soltess
    Community Engagement, Radian6

  2. If you need validation for this post, I got it tonight at Target. I was shopping there with my 25 year old daughter for things for her new apartment. The cashier ringing us up was friendly, engaging, and wished my daughter good luck in her new apartment. Bet she makes $8.50 an hour. She's a keeper in my book.

  3. The "consumers are willing to pay more for better service or a better overall experience" contention is simply the result of poor market research.

    What I think consumers are really saying is "if you're going to raise your prices — or if you're going to charge for me something in the first place — it better be for superior service or for a better experience than I currently receive."

    Your conclusions here are spot on.

  4. Good! Love the idea of customer service and always lowering costs;

    When you need a plumber and are ankle deep in dirty water I always have a need to discuss their hourly rate of $ 185 and a 3 hour minimum for a night call out.

    Just because you don't see or understand what some professions do does not negate their worth.

    David Pylyp
    Living in Toronto

  5. Thanks Zoe. And your comment remindes me of a quote from one of my favorite movies. Charlie Sheen asks "How much is enough? How many yachts can you waterski behind?" Was Gordon Gekko really that happy? Too many of us chase the brass ring in terms of monetary compensation. When in contrast, the most successful entrepreneurs never set out to be a billionaire as their primary motivation.

  6. Awesome! thanks for sharing that story.

  7. Thanks Ron. As a researcher, you know all too well the lose application of statistical methods and cause and effect conclusions that are running rampent. This is one of them. I agree that the conclusion drawn is actually the problem. thanks again for the comment.

  8. thanks much for stopping by and the comment David.

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